Gold is all set to regain its shine in the upcoming quarter. At the same time, it will put an end to the skeptical notions of investors regarding gold as a safe haven commodity for investments. At present, the world has been tempted by the current rally of the US dollar, but the reason behind it is not genuine; rather it seems a race for the worst, and rival currencies are not performing well. The US dollar's recent gains are exorbitant and manipulated. Investors can see at least 38% retracement of the current dollar rally, which will help gold get its upward momentum.

The US dollar index is showing bearish signals and a short term correction is inevitable. The dollar has received a fair amount of gains in a relatively short period of time, and therefore, as a repercussion, retracement is bound to occur sooner or later. The US has recorded 3.30% annual growth rate in the second quarter of 2008, but this was led by an increase in net exports, which were cheaper due to the weakened dollar during same period. Several currencies hit high levels, with the Euro above $1.60 and the GBP above $2.00, and this made imports of US goods cheap for emerging markets as well as for the Euro zone.

Recession - the word itself is enough to create a panic in the stomachs of the whole world. If someone gets up and checks the empirical meaning of recession in the good lexicon, he or she will feel something bad; fear will dance in front of him or her. It looks like coming to hell just after knocking at the door of heaven.

At this juncture, the world is confronting the same fearful word Recession in an empirical way. The world had good news that the U.S. GDP (Gross Domestic Product) has grown 3.3% annually in the second quarter of 2008, but it was just like an oasis and faded away when jobless claims were reported at 444,000 last Thursday. Rising inflation, housing slowdown, a 16 year low in housing prices, diminishing industrial growth, and the Federal Reserve policy on interest rates all are rubbing salt on the wounds. Now the US government is pondering Fannie (FNM) and Freddie's (FRE) financials and is set to take over the housing mortgage giants.

Financial markets are facing turmoil all over the world and it won't be over until major currencies stop swaying up and down. Commodities, stocks and bonds are not independent - financial market moves are governed by several factors, including export-import, growth rate, leading economic indicators, currencies, industrial production, unemployment, monetary policies and geopolitical events.

Among these factors, currency rates play a salient role in money markets, which was clear in the past few weeks. The Euro and USD as usual are playing a north – south game, which has left financial markets in a state of uncertainty.

Gold traded lower this past week, losing $20 from the previous week's closing of $929. News flows were slightly positive for gold, with recession fears creeping in again with higher jobless claims, less than expected U.S. GDP growth, lower non-farm pay rolls increased unemployment rates; however the markets seemed to finally be thinking differently.

Funds and investors were seen moving their investments from the commodities market on receding oil prices, thereby strengthening the U.S. dollar against major currencies, evident from the dollar index, which closed higher compared to the previous three weeks, indicating an intermediate uptrend for the U.S. dollar in the coming days.